Moving VAT Online

HMRC: moving VAT online

HMRC has announced that, from broadly 1 April 2012, it will be compulsory for VAT registered businesses with a turnover below £100,000 to file VAT returns online and to make electronic payment of any VAT overdue. HMRC estimates that the changes will affect about 785,000 businesses.

Following the introduction of the changes, any business (other than an exempt business) that continues to file paper returns will be subject to a penalty of between £100 and £400. HMRC also intends to introduce an enhanced and streamlined online service for VAT registration, deregistration and variations of business details (for example, a change of address) in October 2012.

Smaller businesses should be encouraged to start making preparations for the move to online filing and electronic payment if they have not already done so. While the move to online registration is not compulsory at this stage, businesses should try and familiarise themselves with these systems and, where possible, use them when they are launched.

This checklist sets out the details of HMRC's proposals.

For further information please contact our Business Law Team.

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